Executive Summary

FTAI delivered a strong Q2 with revenue of $676.2M and diluted EPS of $1.57, both above S&P consensus (Revenue $542.6M*, EPS $1.36*). Adjusted EBITDA was $347.8M, up 30% q/q and 63% y/y, driven by Aerospace Products momentum . Estimates from S&P Global: Revenue $542.6M*, EPS $1.36*.
Management raised 2025 outlook: total segment Adjusted EBITDA to $1.25–$1.30B (from $1.10–$1.15B), Aerospace Products to $650–$700M (from $600–$650M), Aviation Leasing to ~$600M including $54M insurance, and 2025 Adjusted FCF target to ~$750M (from ~$650M), citing SCI ramp and MRE adoption .
Operationally, module production ramped to 184 CFM56 modules (+33% q/q), AP Adjusted EBITDA reached $164.9M at 34% margin, and AP market share increased to ~9% annualized (vs ~5% last year) .
Liquidity remained solid with $301.9M cash and a fully undrawn $400M revolver; dividend maintained at $0.30 for the quarter .
Potential stock catalysts: upward revisions on higher 2025 FCF/EBITDA guidance, PMA part approval timeline (most significant part targeted around October per partner Chromalloy), and acceleration of SCI deployments and QuickTurn Europe ramp .

What Went Well and What Went Wrong

What Went Well
- “FTAI delivered an excellent quarter, generating over $400 million in positive Adjusted Free Cash Flow,” and ended with $302M cash and $400M undrawn revolver .
- Aerospace Products Adjusted EBITDA grew 26% q/q to $164.9M at a 34% margin; AP market share ~9% annualized vs 5% a year ago .
- Module production ramped to 184 (+33% q/q) across Montreal, Miami, and Rome; QuickTurn Europe closed, adding capacity toward 1,800 modules per year at full ramp .
What Went Wrong
- AP margin mixed by deal mix: a large U.S. airline exchange program carried “lower margin” terms to seed a strategic relationship; management expects mix to normalize and margins to expand in 2026 with PMA and repairs .
- Continued interest expense headwind: Q2 interest expense of $64.0M, with total other expense modestly negative; leverage reduction and potential refinancings are under evaluation, but near-term callability limits options .
- Equity losses from unconsolidated entities and profit eliminations tied to SCI (e.g., $(5.0)M equity losses; profit eliminations excluded in non-GAAP) add noise to GAAP results as the partnership scales .

Financial Results

Performance vs prior year, prior quarter, and S&P estimates

Metric	Q2 2024	Q1 2025	Q2 2025	Q2 2025 Consensus
Revenue ($USD)	$443,594,000	$502,080,000	$676,237,000	$542,644,860*
Net Income Attrib. to Shareholders ($USD)	$(228,205,000)	$89,944,000	$161,689,000	—
Diluted EPS ($)	$(2.26)	$0.87	$1.57	$1.36143*
Adjusted EBITDA ($USD)	$213,904,000	$268,558,000	$347,805,000	$285,925,000*

Values retrieved from S&P Global for consensus estimates (marked with *).

Segment revenue composition

Revenue Component	Q2 2024	Q1 2025	Q2 2025
Aerospace Products	$245,200,000	$365,063,000	$420,686,000
MRE Contract Revenue	—	—	$69,585,000
Lease Income	$70,754,000	$68,471,000	$62,439,000
Maintenance Revenue	$51,187,000	$49,607,000	$73,104,000
Asset Sales Revenue	$72,433,000	$18,939,000	$47,915,000
Other Revenue	$4,020,000	$—	$2,508,000
Total Revenue	$443,594,000	$502,080,000	$676,237,000

Segment EBITDA snapshot (where disclosed)

Segment EBITDA	Q2 2024	Q1 2025	Q2 2025
Aerospace Products Adj. EBITDA	$91,240,000	$130,945,000	$164,864,000
Aerospace Products EBITDA Margin %	—	36%	34%
Aviation Leasing EBITDA	—	—	~$199,300,000

KPIs and operating metrics

KPI	Q2 2024	Q1 2025	Q2 2025
CFM56 Modules Produced (units)	—	—	184
QoQ Modules Growth	—	—	+33%
Montreal Turnaround Time (days)	—	83	66
AP Market Share (annualized)	~5% (prior year)	—	~9%
Cash & Cash Equivalents ($)	—	$112,133,000	$301,911,000
Revolver Availability ($)	—	—	$400,000,000 undrawn
SCI – Aircraft Owned/LOI (units)	—	98	145
Dividend per Common Share ($)	—	$0.30	$0.30

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA (Reportable Segments)	FY 2025	~$1.10–$1.15B	~$1.25–$1.30B	Raised
Aerospace Products EBITDA	FY 2025	~$600–$650M	~$650–$700M	Raised
Aviation Leasing EBITDA	FY 2025	~$500M	~$600M incl. $54M insurance	Raised
Adjusted Free Cash Flow	FY 2025	~$650M target	~$750M target	Raised
2026 Adjusted EBITDA (segments)	FY 2026	~$1.4B (raised from $1.25B)	“Meaningful upside” to $1.4B; update later this year	Positive bias

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Capacity Expansion (QuickTurn Europe)	Announced JV; expected +450 modules capacity; target 1,800 modules at full ramp	JV closed; early ramp (29 modules in Q2; targeting 100 FY); supports EMEA and China via CAAC	Accelerating
MRE Adoption & SCI Scale	SCI launch with 2025 operations planned; 2025 target FCF ~$650M; modules focus in Montreal	145 aircraft owned/LOI; ~$4B deployment target in 2025; ~$70M AP sales to SCI in Q2 (~14% of AP)	Accelerating
AP Margins & PMA	AP margin 36% in Q1	AP margin 34% in Q2; PMA part 3 final app submitted May 1; example timeline implies ~Oct approval; 40%+ AP margins targeted in 2026	Improving into 2026
Production & Throughput	Module line specialization in Montreal initiated	184 modules produced (+33% q/q); Montreal TAT improved from 83→66 days; AR-based training rollout	Improving
China Opportunity	—	CAAC license at Rome enables direct sales/exchanges into China; large installed base with limited orders extends useful life and maintenance demand	Emerging
Capital Allocation & Leverage	—	Target <3x Debt/EBITDA; after hitting ratings goal, surplus capital likely for buybacks; no near-term maturities, refi math under review	Balance sheet strengthening

Management Commentary

“Our Aerospace Products segment continued to perform, with 81% year-over-year growth in Adjusted EBITDA in Q2 2025 and an increase in market share to approximately 9% on an annualized basis, up from 5% last year.”
“We refurbished 184 CFM56 modules this quarter… an increase of 33% versus last quarter… we anticipate these measures will contribute to drive significant production growth over the next several quarters.”
“We are increasing our overall target from $650 million to now $750 million in adjusted free cash flow for all of 2025… updating total estimated 2025 business segment EBITDA from $1.1–$1.15 billion to $1.25–$1.3 billion.”
On PMA timeline: partner Chromalloy submitted final application for the most significant part by May 1; prior similar approval took six months, implying an October timeline; additional parts in 2026 .

Q&A Highlights

AP margin path to 40%+ in 2026 driven by PMA, vertical integration (e.g., Pacific Aerodynamic compressor blade/vane repairs), procurement programs, and mix normalization; 5–10 pts uplift expected in 2026 .
Capacity to ~1,800 modules/year targeted within two years; technician hiring/training (academy + AR simulation) is bottleneck focus; Rome and Montreal favorable talent markets .
SCI: 145 aircraft owned/LOI across ~50 customers; SDI/SCI 2 decision likely in Q3/Q4; model seen as repeatable with strong LP demand .
Next-gen engine timing: LEAP/GTF assets likely around 2028–2029 as platforms stabilize, PBH programs roll off, and economics improve .
China opportunity enabled via QuickTurn Europe’s license; large installed fleet with low new orders extends in-service lives, boosting shop visits and exchange demand .

Estimates Context

Q2 2025 outperformed consensus: revenue $676.2M vs $542.6M* and diluted EPS $1.57 vs $1.36* . Values retrieved from S&P Global for consensus estimates (marked with *).
Adjusted EBITDA of $347.8M exceeded S&P EBITDA consensus of $285.9M*, though definitions differ versus company non-GAAP Adjusted EBITDA .
Implications: Street models likely need higher AP volumes/margins and SCI contribution, plus higher 2H FCF and segment EBITDA to reflect raised guidance .

Key Takeaways for Investors

AP engine aftermarket flywheel is working: rising module throughput, faster TAT, and deepening vertical integration support sustained volume growth and margin expansion into 2026 (40%+ AP margin target) .
SCI is a structural accelerant: sizable on-lease aircraft pipeline (145 owned/LOI) drives AP demand, fee income, and capital-light growth; a follow-on vehicle appears likely in 2H25 .
Guidance reset is material: 2025 segment EBITDA +~10% at midpoint and FCF +~15% vs prior, increasing probability of capital returns after ratings goal is met (<3x leverage) .
Near-term catalysts: potential PMA part approval for the most significant part around October; additional repair capabilities (Pacific Aerodynamic) should aid margins .
Execution watch items: deal mix impacts on AP margin (e.g., low-margin seeding deals), SCI closing cadence, and technician hiring/training to sustain module ramp .
Strategic optionality: balance sheet strength (cash $301.9M; undrawn $400M revolver) positions FTAI to pursue targeted M&A in repairs and consider buybacks as excess cash builds .
Medium-term thesis: extended useful lives of NG/ceo fleets, OEM price inflation, and AP market share gains (now ~9%) support durable growth even if secondary engine prices plateau .

Notes: Values retrieved from S&P Global for consensus estimates (marked with *). All non-GAAP metrics, including Adjusted EBITDA, are as defined and reconciled in FTAI’s materials. Sources: Q2’25 press release and 8‑K exhibits ; Q2’25 earnings call transcript ; Q1’25 press release ; Q4’24 press release ; QuickTurn Europe closing press release .

FTAI Aviation Ltd. (FTAI)·Q2 2025 Earnings Summary